John Huey, who was relaxing at the Time magazine Person of the Year luncheon yesterday, is expected to step down as editor-in-chief of the Time Inc. empire by the end of the year, Media Ink has learned.

Martha Nelson, a veteran of People and InStyle who is currently the No. 2 as the editorial director of the company, is expected to move into the top spot.

Although there is no longer mandatory retirement at age 65, Huey turns 65 next spring, and he’s quietly been telling friends he will be leaving.

Sources say Huey has already accepted a Shorenstein fellowship for the spring semester at the Harvard Kennedy School. It’s been a favorite stop for other top editors before him including Ben Bradlee of the Washington Post and Dan Okrent, the one-time public editor of the New York Times.

Huey, who worked at Dow Jones and the Wall Street Journal before joining Time Inc. in Atlanta, always seemed to cultivate the persona of a Time Inc. outsider — even though he spent 25 years at the nation’s largest magazine publisher, including 12 years in upper management.

Huey had helped rejuvenate Fortune from 1995 to 2000 as its top editor before he was catapulted to the No. 2 job as editorial director in the summer of 2001 by then-editor in-chief Norman Pearlstine.

The two proceeded to shake up the once- staid top ranks of the company, and Huey succeed Pearlstine in the top spot in 2006.

He was seen as a sometimes-controversial figure, but always a skillful political operator and a hard-nosed journalist. Said one source, “In his next life, he might want to audition for the CBS show ‘The Survivor.’ He managed to survive (former Time Inc. CEO) Ann Moore and then her successor, (Jack Griffin) who wanted to fire everyone.”

After Griffin was chased from power, Huey even spent ten months as an acting co-CEO in 2011 with Chief Financial Officer Howard Averill and general counsel Maurice Edelson , while Time Warner CEO Jeff Bewkes searched for a new leader after bouncing Griffin, who spent only five months on the job. They were known as the “junta,” the ‘triumverate” or the “three EOs.”

Laura Lang, the former CEO of Digitas, was named the new CEO late last year and took up the job in January.

While Huey’s contract ended earlier this year, he agreed to stay put to help with a transition while Lang looked at pressing business-side problems.

During his tenure, Huey was forced to preside over major cost- cutting, prompted by sharp declines in magazine-advertising revenue. “It’s a smaller empire today,” said one source.

In 2005, the year before Huey became boss, the Time Inc. publishing division, which then included a books division and many more lifestyle magazines, had revenues of $5.8 billion and operating income of $1.3 billion. In 2011, the division had revenues of $3.7 billion and operating income of $580 million.

Huey also tried to figure out the shifting multiplatform world that is reshaping the media horizon. “Nobody has solved the riddle yet, but at least Time Inc. has started down the road,” said one veteran observer. “The challenges ahead will be, ‘How does Time, the last surviving newsweekly, survive, and how can the division’s top moneymaker, People, resume an ambitious growth curve?’”

“John has been saying for years he just wanted to get the boat to the other side of the storm,” said one colleague who said he felt that the arrival of Lang — and more recently the appointment of former Dow Jones president Todd Larsen as the head of the News and Sports Group — made for a good time to transition.

Huey had always taken a keen interest in the news, business and sports side of the empire, more so than in the women’s titles of InStyle, Real Simple or the top moneymaker, People.

The rumors of a new round of downsizings seems to have subsided, evan as management consultants Bain and McKinsey have been working behind the scenes this year. The latest word seems that any new round of cuts have been pushed off until at least early next year — which means it will fall to Huey’s successor to figure out.

DC’s press Baron

Marty Baron, editor-in-chief of the Boston Globe, is going to become the new executive editor of the Washington Post, ending the reign of Marcus Brauchli, who landed the job in 2008 after being forced out of the Wall Street Journal.

(The WSJ was taken over by News Corp., which also owns The Post).

Brauchli was brought in by Wash Post publisher Katharine Weymouth with the idea of shaking up the paper. He was the first non-WaPo insider to land the job and the first one that presided over a newsroom that included both the print and digital operations under one roof.

Brauchli will remain with the company as a vice president in charge of digital initiatives.

Reports out of Washington said he clashed in recent months with Weymouth over the direction of the paper.

One source said he also clashed with the president and general manager Steve Hills, who was pushing for a hyper-local WaPo, while Brauchli still pushed it to be a broad-reach national player.

Some were not sorry to see Brauchli go.

“I am enormously proud of what we have accomplished here, and honored to have worked among so many brilliant journalists,” Brauchli said in a statement. “There is no finer newsroom.”